China will not be listed as a currency manipulator when the Treasury Department releases an update to its Foreign Exchange Report ahead of the signing of the phase one trade deal, sources tell FOX Business. A formal announcement could come as early as today or before Wednesday when the phase one deal is set to be signed.
China’s removal from the list is a "want" from Beijing before the deal is signed. Being included on the list impacts China’s ability to grow its economy, possibly limiting growth.
Last month, the U.S. and China agreed to a partial trade deal that calls for Beijing to purchase up to $200 billion of American products over the next two years, in addition to protecting against intellectual property theft and technology transfer. Beijing also agreed to end the manipulation of its currency, the yuan.
In return, the U.S. agreed to reduce tariffs on Chinese goods, but will still levy duties against $380 billion of those products.
The Treasury Department designated China as a currency manipulator on Aug. 5, after the yuan fell to a more than 10-year low against the U.S. dollar. At the time, the Treasury Department pointed to Beijing’s “long history of facilitating an undervalued currency through protracted, large-scale intervention in the foreign exchange market” as the reason for the designation.
Beijing manipulated its currency, the yuan, throughout the 1980s and 1990s in order to keep labor and production costs low as it opened up its economy.
The offshore yuan has weakened by 3 percent to 7.0988 per U.S. dollar since China was named a currency manipulator in August, and is down 1.1 percent this year, according to data from Tullett Prebon.
FOX Business' R.N. White contributed to this report.